Bitcoin and the Currency Wars: How the Global Fiat Battle Led to the Rise of Sovereign Money

In 2008, the world stood on the brink of collapse. The global financial system, built on debt and leveraged to the edge of reason, imploded. Banks failed. Millions lost their homes, jobs, and life savings. Amid the ashes of this catastrophic failure, two pivotal events occurred:

Governments and central banks initiated a new era of monetary manipulation, with the U.S. and China at the forefront of a brewing currency war.
An anonymous developer, Satoshi Nakamoto, released Bitcoin—a decentralized, trustless system for value transfer and storage.

These events reshaped the financial landscape, setting the stage for the current fiat currency wars and Bitcoin’s emergence as a lifeboat in a turbulent monetary sea.

2008: The Dawn of the Currency Wars

Understanding the world’s monetary systems has been a lifelong journey for me, beginning at the age of 17 when I watched the documentary Zeitgeist Addendum. In this film, American filmmaker Peter Joseph outlined the intricacies of the Federal Reserve's money creation process. At the time, I was too young to grasp that this process of adding new money to the existing supply contributed to various economic problems, including inflation. I was also unaware that 2008, the year of the documentary’s release, marked a historic global financial crisis—a crisis that would trigger the largest currency devaluation experiment in history.

The 2008 Global Financial Crisis exposed a fundamental truth: the traditional financial system was broken, propped up by artificial liquidity, flawed incentives, and systemic corruption.

To understand the magnitude of this, consider these examples:

Family Savings Wiped Out: Imagine a family who had spent decades saving for their child’s college education, only to watch their savings evaporate overnight as banks froze accounts or went bankrupt. These were not gamblers or speculators—just ordinary people relying on a system they trusted.
Homes Lost: Picture a couple who had diligently paid their mortgage for years, only to lose their home because they couldn’t keep up with skyrocketing adjustable-rate mortgage payments after the economy collapsed. Their dreams of stability and ownership shattered.
Jobs Vanishing: Think of the factory worker who showed up to work one day only to find the gates locked, the company bankrupt, and their livelihood gone—all because larger financial institutions gambled away their future.

In response to this widespread devastation, central banks turned to their oldest trick—printing money. This process, known as Quantitative Easing (QE), involved central banks injecting massive amounts of money into the economy to stabilize financial markets and stimulate growth.

Under QE, central banks purchased government bonds and other securities, increasing the money supply. This was akin to pouring water into a leaky bucket: while it provided temporary relief, it did nothing to address the underlying structural issues. For families, this meant rising inflation that further eroded their purchasing power, as the cost of goods and services climbed faster than wages.

The United States led the QE charge flooding markets with liquidity and slashing interest rates to near-zero. Only much later would I fully appreciate the significance of these measures. Part of The Federal Reserve's strategy was to intentionally devalue the dollar; this in order to reduce debt costs, and stimulate economic growth. The U.S. economy needed an artificial boost, and fiat currency debasement was the chosen solution.

China Enters the Fray

Across the globe, China adopted similar tactics, engaging in competitive monetary policy. Simply put, currency, controlled by monetary policy became a weapon for trade competition. Currency became void of being a measure of value for things in the economy and became a political tool for nation-states to compete with each other. Typically labeled as trade wars by mainstream media, this euphemism obfuscates the reality of what truly happens in the background shielding and protecting the power of incumbent financial regulators and institutions.

China’s rapid rise depended on cheap exports, and it could not allow the U.S. to gain a competitive edge. To counteract the devalued dollar, China suppressed the value of the yuan, manipulated interest rates, and accumulated massive foreign reserves to protect its export-driven economy.When a currency is cheap, international buyers are more inclined to purchase goods or establish manufacturing bases in that country. This dynamic, combined with the central authority’s control over currency valuation, creates perverse incentives and corrupts monetary policy.

This is the essence of using currency for political purposes—when governments distort the value of money to gain a competitive advantage at the expense of their citizens. This practice is known as a currency war.

The Race to the Bottom

As the U.S. and China engaged in currency manipulation, other nations soon followed. Japan, Europe, and emerging markets all vied for weaker currencies to stimulate growth. The outcome was a race to the bottom: money lost its value, debt ballooned to unsustainable levels, and savers bore the cost of central bank policies.

Have you ever wondered why central banks worldwide appear to act in coordination? Why, when one country lowers interest rates, others follow suit? Studying currency wars has clarified this pattern for me and deepened my understanding of Bitcoin’s significance.

This morning, I examined the GCNY10YR Index for 2024, which tracks China’s 10-year government bond yields. Over the past year, these yields have plunged by 34%. Why? Because China, grappling with economic stagnation, a collapsing real estate market, and shrinking exports, has injected massive liquidity into its system. The bond market’s message is clear: “Something is broken.”

China is not alone. The U.S. faces rising debt, deficits, and declining real interest rates. Both nations are trapped in a feedback loop, debasing their currencies to outmaneuver each other. In this zero-sum game, everyone loses.

Bitcoin: The Future of Money in a Post-War World

The global currency wars will not end with a winner. There will be no victor, no trophy. Fiat currencies will continue to weaken, trust will erode, and people will seek alternatives.

This is where Bitcoin shines.

Bitcoin is not just another currency; it is the foundation of a new financial system. A system built on trustless transactions, decentralized governance, and monetary integrity. In this system, individuals are sovereign—owning their wealth and controlling their future. 5% of the world has realized that it is a viable alternative to the monetary systems run by nationalists. If you are reading this you have effectively front-run 95% of the world.

As the GCNY10YR Index declines and the global fiat war intensifies, Bitcoin offers a lifeboat. It is the ultimate escape from a system designed to fail.

This is why Bitcoin matters. It is not merely an asset, it is a revolution.

Masego

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